Selling on the internet is becoming a necessity. People who didn’t have the means to sell their products now have the technology within reach to quickly access millions of users. Stores or small retailers who fight month to month to sell their products now have an online sales channel contributing to their income. Who would’ve thought a simple shopping cart could start such a revolution! Many people haven’t taken the leap because they think that creating a virtual store is only for those who know about computers or big companies. Reality is very different nowadays. Platforms like Jumpseller have made having an online store accessible, in a quick and simple way, to anyone with an entrepreneurial spirit. One of the least known aspects when opening a store, that also generates great doubt, has to do with payment methods, its complexities and associated risks. In this article we will explain different alternatives, why we recommend them and how this shouldn’t be an issue when opening your internet business.
Connectivity in Latin America is growing but different realities exist
E-commerce in Latin America will surpass the US$100.000 million mark in 2018, a 117% increment with respect to 2014, due, mainly to an increase in connectivity and use of mobile devices. In 2012, a bit over 42% of the population had Internet access. It’s expected that in the next three years, about 60% of the population will be connected to the Internet, Chile leading with 71%, followed by Argentina (68%) and Colombia (66%).
“It’s expected that 51% of internet users will buy from online stores in 2018 and, considering the size of the Colombian market, this is a very interesting number” While countries in the continent have some differences in the proliferation of internet use, online shopping and credit cards, numbers show that the market is evolving rapidly towards a bigger number of sales in virtual stores. This evolution is being driven, at the same time, by the use of credit cards. Talking about online payment methods, there are multiple alternatives in each country. Let’s talk about 2 cases:
Colombia… Yeah, the Caribbean!
There are multiple, very safe, payment methods in Colombia: Paypal, Skrill, Interpagos, MercadoPago and PayU, for example. They can be completely integrated into your online store so your customers can buy with credit and debit cards. While the Colombian market has been adopting the e-commerce model for their transactions for a few years, the trend shows an increase in trust for the use of these new technologies. In 2015 alone there was an increase of 7% in the use of credit cards in Colombia, which positions it closer to more advanced markets like Chile. It’s expected that 51% of internet users will buy in online stores in 2018 and, considering the size of the Colombian market, this is a very interesting number.
Chile… The Chilean miracle
Chile also has a variety of online payment methods: Paypal, Webpay, Dineromail, Khipu, Skrill, PayU and Servipag are some of them. While Chile is a few years ahead regarding payment methods, the Chilean market is much smaller than the Colombian one. The trust in internet payment methods has been increasing gradually in Chile and it’s expected that new actors in online payment will emerge soon. By 2018, it’s expected that 65% of internet users will make an online purchase at some point.
Online credit card payments are common in the U.S.
In the US, credit card payments are the most common. Those who have proof of income and a clean credit-rating, by definition, have access to credit. In this way everything is more standard and electronic payment systems revolve around processing credit cards.
The most important part: Know your customer
In order to choose the right payment method for your business you must perfectly know who your customer is. If your clients are people over 50 years old with low access to the Internet and little use of new technologies, it is probable their preferred payment method is cash. If your client is someone between 20 and 40 years old, used to using the Internet for looking up information and products, it makes sense to offer an online payment method. Today, technology allows making online payments in a simple and intuitive way. The possibility of unfamiliar users to gradually start using internet payments shouldn’t be discarded.